TaxTMI 
TaxTMI 
2020 (9) TMI 1205
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....al Creditor and Corporate Debtor are same, debts of default are same, Operational Creditor has sent demand notice under Section 8 of Insolvency and Bankruptcy Code, 2016 to the Corporate Debtor and Corporate Debtor replied the same raising same defense thereto, we proposed to dispose-off both proceedings by common order. 3. To appreciate the claim of the Operational Creditor and defense of the Corporate Debtor, we noted the facts in CP(IB) No.688/KB/2020, they are as follows: (i) Most of the facts are not in dispute, they are - (ii) In February 2004 the Operational Creditor had approached the Corporate Debtor for supply of iron ore. In pursuant thereto on 11.03.2004, Memorandum of Understanding (MOU in short) was entered into by and between the parties. There was clause of invocation of arbitration proceedings in case of dispute. As the Corporate Debtor failed to supply iron ore inspite of receipt of payment, the Operational Creditor invoke the arbitration clause in MOU. On 15.02.2010, two Members Arbitral Tribunal passed award for sum of Rs. 2,79,92,122/- (Rupees Two Crore Seventy Nine Lakh Ninety Two Thousand One Hundred Twenty Two Only) together with interest @ 10% per ....
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....ved the notice on 18.02.2020. The Corporate Debtor did not pay the amount within 10 days from the receipt of notice of demand nor pointed out any pre-existing disputes in form of suit of Arbitration proceedings. Hence, Corporate Debtor may be admitted in Corporate Insolvency Resolution Process. To substantiate his argument, Learned Senior Counsel laid on following orders / rulings; (i) K. Kishan Vs. Vijay Nirman Company Private Limited - (2018) 17 SCC 662 (ii) Decor India (P) Ltd. Vs. National Building Construction Corporation - 142 (2007) DLT 21 (iii) Hindustan Construction Company Ltd. Vs. Union of India & Ors. - AIR 2020 SC 122 (iv) Orissa Stevedores Limited Vs. Orissa Minerals Development Company Limited - CP(IB) No. 729/KB/2017 5. As against this, Learned Counsel for the Corporate Debtor submitted that in-fact, the Corporate Debtor has very good defence on facts. Apart from that, its Appeal challenging the award is still pending in Hon'ble High Court, hence, this proceedings is not maintainable. He submits that by notice dated 25.02.2020, the Corporate Debtor informed the Operational Creditor that Appeal against the award is still pending, hence, this applic....
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....e Operational Creditor or there is record of dispute in Information Utility or - (e).......... The word dispute appearing in Section 5(ii)(d) has been defined under Section 5(6) of Insolvency and Bankruptcy Code, 2016 as follows: Section 5(6) of Insolvency and Bankruptcy Code, 2016 defines dispute as "dispute" includes a suit or arbitration proceedings relating to - (a) the existence of the amount of debt; (b) the quality of goods or service; or (c) the breach of a representation or warranty; From the plain reading of un-disputed facts in this proceeding, it is clear that on the date on which the Corporate Debtor was served with demand notice under Section 8 of the Insolvency and Bankruptcy Code, 2016 or on the date on which the application is filed against the Corporate Debtor, no arbitration proceedings was pending challenging the award. 9. Apart from above, the point whether Appeal pending challenging the award could be said to be the dispute had come for consideration before Hon'ble Apex Court in case of K. Kishan Vs. Vijay Nirman Company Private Limited - (2018) 17 SCC 662. In that case, Hon'ble Apex court noted the facts in para -6 which are as....
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....14.02.2020, Operational Creditor gave the Corporate Debtor notice under Section 9 of the Insolvency and Bankruptcy Code, 2016. On 28.02.2020. 11. What we gathered from the above facts is that the operational creditor sent a demand notice three months after the Corporate debtor's appeal was dismissed by Hon'ble high Court. As soon as the Corporate Debtor received the demand notice, its officers swung into action and get the appeal restored. Meantime, the operational creditor had filed this application. It appears from record that the officers of the Corporate Debtor using the proceedings under the law either to delay or to avoid the legitimate dues of the Corporate Debtor on one or the other ground. 12. For all above reasons, we hold that Operational Creditor has established that the Corporate Debtor committed default in paying the operational debt of Rs. 5,62,01,258/- inspite of receipt of demand notice. There was no dispute pending (by way of arbitral proceeding or otherwise) on the date on which the default occurred or on the date on which the application is filed to initiate Corporate Insolvency Resolution Process of the Corporate Debtor. 13. We also note that n....